Date: Wednesday, April 21, 2021
10:00am-11:40am PT / 1:00pm-2:40pm ET
Format: A BVR Webinar

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Featuring  (click image for bio)

Travis W. Harms
Mercer Capital
Z. Christopher Mercer
Mercer Capital

About This Program

The integrated theory of business valuation provides a conceptual framework for disciplined analysis of valuation questions. Too often, valuation analysts are tempted to view individual components of a valuation assignment on a piecemeal basis. Adhering to the integrated theory helps valuation analysts develop base valuation conclusions, discounts, and premiums that are rooted in a shared perspective of the subject company and the subject ownership interest. In the first webinar of the three-part series, Chris Mercer and Travis Harms described the integrated theory conceptually. In the second webinar, they took a more practical turn and explored how the conceptual framework of the integrated theory manifests itself in the primary methods analysts use to derive indications of value. In the third and final webinar of this three-part series, they turn to shareholder cash flows rather than enterprise cash flows. Specifically, they will examine the restricted stock discount (and the restricted stock studies) and the pre-IPO discount. They delve into the inputs to the quantitative marketability discount model (QMDM), including the expected holding period, anticipated dividends, expected growth in value, and the required holding period return, and end with a discussion of the appropriate treatment of minority interests in tax pass-through entities.


    Valuing Shareholder Cash Flows

    • Restricted Stock Discounts and Pre-IPO Studies
      • The guideline transaction method;
      • Restricted stock discounts explained;
      • Restricted stock discount studies; and
      • Pre-IPO discounts.
    • The Quantitative Marketability Discount Model (QMDM) Introduction
      • Potential valuation approaches at the shareholder level;
      • Asset-based approach; and
      • Market approach.
    • The QMDM Assumption in Detail

      • Assumption 1: Expected Holding Period for the Investment
      • Assumption 2A: Expected Dividend Yield
      • Assumption 2B: Expected Growth of Dividends
      • Assumption 2C: Timing of Dividend Receipt
      • Assumption 3A: The Expected Growth Rate in Value
      • Assumption 3B: Adjustments to the Terminal Value
      • Assumption 4: Required Holding Period Return
      • Market Evidence Regarding Holding Period Premiums

    • Applying the Integrated Theory to Tax Pass-Through Entities
      • The nature of the S corporation benefit;
      • The firmwide-level value of S corporations;
      • Other observations regarding relative value at the firmwide levels;
      • The shareholder-level value of S corporations; and
      • S corporation considerations for the QMDM inputs.

      Learning Objectives Coming Soon

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Multi-User CPE Policy

Admission to this program includes one CPE certificate for one individual. Any additional listeners requesting CPE must pay a processing fee assessed at the completion of the online CE survey for this course.

CPE Processing Fees may be bypassed by entering a valid, unused CPE Authorization Code (for single event purchasers) or by logging into BVR's website (for subscribers to BVR's Training Series).

CPE Information

Prerequisites: Knowledge of Business Valuation
Program Level: Advanced
Preparation Required: None
Delivery Method: Group Internet-Based
Recommended CPE: 2 Credit Hours (Accounting Technical)

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